india

Import duties on 85 percent of Korean goods, including auto parts and electronics, will be cut or phased out over the next decade, Korea's Trade Ministry said today. Indian Commerce Minister Anand Sharma and his Korean counterpart Kim Jong Hoon will sign the agreement in Seoul, said Choi Kyong Lim, the official overseeing trade agreements, said today in Seoul.

Hyundai Motor Co., LG Electronics Inc. and other South Korean companies will get greater access to India's 1.2 billion people in a trade deal to be signed tomorrow.
India's $1.2 trillion economy grew 5.8 percent in the three months to March 31, brushing off the global slowdown that has dragged Korea into recession. Singapore's exports to India excluding oil products more than doubled in the two years after they signed a similar accord in 2005, turning the city state's deficit to a surplus, according to Indian Commerce Ministry data.
"South Korea is looking to expand its presence in India with its vibrant economy and 1.2 billion population," said Myong Jin Ho, a researcher at the Institute for International Trade in Seoul.
Bilateral trade between India and South Korea rose 39 percent last year to $15.6 billion. South Korea exported $3.6 billion of goods to India, and imported $1.6 billion in the first six months of this year.
India's growth puts more money into the hands of consumers in a country where almost 30 percent of the population is under 15 years of age. Younger people tend to spend more on vehicles, phones and other consumer goods.
Car Demand
India will eliminate or reduce tariffs on 85 percent of South Korean exports over 10 years, Korea's Trade Ministry said. These will include auto parts, tankers, electronic goods, machinery parts and synthetic rubber.
South Korea's cuts will cover about 90 percent of Indian exports, including polycarbonates, leather, industrial diamonds, gasoline and corn for livestock.
Hyundai, which operates an auto plant near Chennai in southeastern India, sold 244,030 vehicles in the country in the year ended March 31. The largest South Korean automaker gets 55 percent of sales from emerging markets including India and China, where car demand has withstood the global slowdown.
LG Electronics, the world's third-largest maker of liquid- crystal-display televisions, also has plants in India to make consumer appliances and personal computer monitors.
The two nations decided to exclude other agricultural goods, finished automobiles, fisheries and textiles from the deal.
The Korean law implementing the pact is expected to take effect on Jan. 1, Choi said.
Once the cuts begin, Korea's exports to India will likely increase by an annual average of $177 million and India's exports to Korea $37 million over the next 10 years, according to Korea Institute for Industrial Economics & Trade.
Conservative
"Those forecasts may be conservative, given India's potential," said Myong.
The two nations will also expand job opportunities for skilled personnel from India in the field of information technology, engineering, management consulting, machinery and telecommunications, and scientific research, the ministry said. It didn't specify any quotas on the number of Indian nationals expected to take up jobs in Korea in the future.
India has also opened up its market to investment in all its industries with the exception of agriculture, fisheries and mining. South Korea will be able to invest in food processing, textiles, garments, chemicals, metals and machinery, it said.
The following is a table of the top 10 traded goods for South Korea and India, according to the Korean Trade Ministry.

Other Important News In India

Indian shares rose 1.6 percent on Monday, July 20 as reports of positive corporate earnings "from across the world" convinced many that the global economy is actually recovering.

Several factors, including strong global and local liquidity, a recovery in earnings growth and strong corporate balance sheets, will spur the market over the next 12 months, Morgan Stanley analyst Ridham Desai said. He added, "Indian equities are in a sweet spot. We would continue to buy the dips in the market".
A few of the biggest companies in India, Reliance Industries, Tata Consultancy Services Ltd and Infosys Technologies rose, gained 3.1 percent, 11.9 percent and 4.5 percent, respectively.
Signs of economic recovery are whetting investor's appetite for riskier assets, with "record low global interest rates and trillions of dollars of stimulus spending helping the world recover" from the deep recession.

"Industrial activity in India will gain more traction as the favorable effect of lower bank lending rates and a continuing fiscal boost offsets a still-weak export sector," said Rajeev Malik, a regional economist at Macquarie Group Ltd. in Singapore. The rise in output "pretty much destroys the probability of further rate cuts."

India's industrial production increased at the fastest pace in eight months as record-low interest rates and government stimulus measures helped revive demand and investment.
Output at factories, utilities and mines jumped 2.7 percent in May from a year earlier after a revised 1.2 percent gain in April, the statistics agency said in New Delhi today. That was more than double the 1.3 percent increase expected by economists.
Economies across Asia are starting to show signs of recovery from the worst global recession since the Great Depression, prompting policy makers to stop lowering interest rates. The World Bank last month said India may overtake China next year as the world's fastest-growing major economy.

India's Finance Minister Pranab Mukherjee announced plans to borrow a record 4.51 trillion rupees ($93 billion) to fund budget spending on roads, power and aid for the poor. Stocks, bonds and the currency slumped.
Unveiling the budget for the year to March 2010, Mukherjee said India's fiscal deficit is expected to widen to a 16-year high of 6.8 percent of gross domestic product from a revised 6 percent. Indirect taxes will be streamlined through a goods and services tax, he said in his speech in New Delhi today.

Prime Minister Manmohan Singh's government is spending more to speed up economic growth and reduce poverty in a nation where malnutrition is worse than Sub-Saharan Africa. Stocks and the currency weakened on investor disappointment that Mukherjee didn't announce major asset sales and concerns a ballooning budget deficit may lead to a credit-rating cut.
"The budget has failed to instill confidence as to how the government will achieve fiscal consolidation," said Rupa Rege Nitsure, chief economist at state-owned Bank of Baroda in Mumbai. "With this kind of a deficit, there is a possibility that India's rating may be downgraded."
The Bombay Stock Exchange's Sensitive Index fell the most in six months, declining 5.8 percent to 14,043.40 at the 3:30 p.m. close in Mumbai. The rupee weakened 1.3 percent, the most in almost six weeks, to 48.5375 against the dollar. The yield on the most-traded 6.07 percent note due May 2014 surged 22 basis points, the most since March 17, to 6.45 percent.

As reported by the finance ministry, Indian economic growth is predicted to spur as much as 7.75 percent in 2009. Two of the most important reasons are the improving U.S economy in second quarter reports and the recent successful harvests from the monsoon rains.

India's exports fell for the eighth consecutive month in May 2009, while industrial output increased 1.4 percent in April 2009. The economy expanded 6.7 percent, which is the most sluggish pace in the past six years, since 2003, where the economy expanded between 8.5 percent and 9 percent.
Among India's many strengths is the country's large service sector, which contributes about 55 percent of India's GDP.
Furthermore, the government's rural jobs program, which guarantees 100 days of work in a year for the poor has kept "rural income and consumption strong," according to the finance ministry.
With income, consumption, growth, output and a strong service sector, India's economy "has shock absorbers" that will ensure the country's economic revival.

The rally this year has helped India post the fifth-best performance among the 89 markets tracked by Bloomberg News globally. Valuations have also climbed, with the Sensex now valued at 16 times reported earnings, double November's low of 8.1 times.
"The relative outperformance and the strong move in the market post the elections have now priced in improving economic fundamentals," the analysts wrote in the report. "The upcoming budget next month will be very important for the overall direction of the market."
The Sensex advanced 1.7 percent to 14,590.18, the highest in more than a week, as of 1:23 p.m. in Mumbai.

India's Sensex gained 49 percent advance this year and further gains depend on government policies to boost economic growth and pare a budget deficit, Nomura Holdings Inc. said.
The benchmark Bombay Stock Exchange Sensitive Index may rise to 16,400 in the next 12 months, a "muted" 14 percent gain from yesterday's close, Nomura analysts led by Prabhat Awasthi said in a report today. Investors should own a mix of so-called defensive and domestic cyclical shares, they added.

There are numerous reasons for deflation to occur. It can be caused by a decrease in the supply of money or credit or by a decrease in government and consumer spending. Side effects that accompany deflation are increased unemployment, due to lower levels of demand in the economy and dwindling profits. This could further increase the severity of a recession.

There are numerous reasons for deflation to occur. It can be caused by a decrease in the supply of money or credit or by a decrease in government and consumer spending. Side effects that accompany deflation are increased unemployment, due to lower levels of demand in the economy and dwindling profits. This could further increase the severity of a recession.
In India, the Ministry of Commerce and Industry has reported that "wholesale prices fell 1.61% in the year to June, compared with a rise of 0.13% the previous week"
Analysts said that prices would continue falling for the next fourth months, now that lower food prices have pulled the index down.
An economist at Nomura, Sonal Verma, predicts that the country will "have negative numbers at least till September, primarily because inflation had picked up very sharply during this period last year." Figures show that inflation rose up to 12.9% in August 2008 but has been decreasing since then.

India's industrial output increased 1.4% from April 2008. An economist at HSBC, Robert Prior-Wandesforde said, "[Indian] output growth almost certainly bottomed on a year-on-year basis in March and we are looking for a healthy upward trend to develop from here."

India's industrial output increased 1.4% from April 2008.
An economist at HSBC, Robert Prior-Wandesforde said, "[Indian] output growth almost certainly bottomed on a year-on-year basis in March and we are looking for a healthy upward trend to develop from here."
This improved perspective of output is due mainly to an increase in domestic demand, particularly from government infrastructure and construction projects, according to Nikhilesh Bhattacharyya, an analyst at Moody's.

President Pratibha Patil has announced that she will push for reforms to revive the economy by taking steps to increase foreign investment in-flows and inject more capital in banks.

President Pratibha Patil has announced that she will push for reforms to revive the economy by taking steps to increase foreign investment in-flows and inject more capital in banks. Welfare programs and higher investment in sectors such as infrastructure will be pursued as well. The president said that welfare projects for farmers and an expansion of rural employment guarantee project are high on the agenda. Families below the poverty line will be given 25kg of rice or wheat every month at 3 rupees a kilo.

For the 2008/09 fiscal year to March 31, India's economy grew 6.7 percent, its weakest in six years and sharply slower than rates of 9 percent or higher in the previous three years.
"A main reason (for the slowdown) was financing drying up as a result of the global crisis," said Malik. "The revival in capital markets automatically means one of the negatives crippling investment is addressed."
Growth was seen at around six percent in the first half and closer to seven percent in the second. Next year, economists expect growth of eight percent.
The economy still has "significant pent-up demand for investment, especially in infrastructure and in affordable housing," said Goldman Sachs economist Tushar Poddar.
The numbers gave cheer to the Congress-led government, which swept back to power earlier this month on a poverty alleviation platform. Its strong mandate is seen as a positive for investors, spelling political stability.
Finance Minister Pranab Mukherjee has said the government will make increasing growth its top priority to help India's "common man" -- even at the risk of ballooning an already large fiscal deficit.

The rise in expenditure on the election campaign may have boosted India's March quarter performance but downside effects from the external turmoil have been far too strong to be fully offset by the jump in political spending, the note said.
"The impressive victory of the Congress party foreshadows economic reforms, which may help to strengthen the Indian economy," said Sherman Chan, economist at Moody's Economy.com.

April 22 (Bloomberg) -- India's 10-year bonds advanced for a sixth day, the longest winning streak in four months, after the central bank said it will buy existing debt.
Benchmark yields were at the lowest in six weeks after the Reserve Bank of India said it will purchase 60 billion rupees ($1.2 billion) of securities in open-market operations tomorrow. The central bank's decision to cut interest rates yesterday may help the government reduce borrowing costs as it plans record debt sales in the fiscal year that started April 1. Bonds erased the day's gains after the drop in yields deterred investors before a debt sale on April 24.

April 22 (Bloomberg) -- India's 10-year bonds advanced for a sixth day, the longest winning streak in four months, after the central bank said it will buy existing debt.
Benchmark yields were at the lowest in six weeks after the Reserve Bank of India said it will purchase 60 billion rupees ($1.2 billion) of securities in open-market operations tomorrow. The central bank's decision to cut interest rates yesterday may help the government reduce borrowing costs as it plans record debt sales in the fiscal year that started April 1. Bonds erased the day's gains after the drop in yields deterred investors before a debt sale on April 24.